2011 RANKINGS: TN Repeats As Automotive Champ

August 4, 2011

Rankings (2011): TN Repeats As Automotive Champ

Tennessee, which recently cut the ribbon on Volkswagen’s new $1 billion auto assembly plant in Chattanooga, has repeated as the top finisher in Business Facilities’ annual state ranking for Automotive Manufacturing Strength.

“With new VWs rolling off the assembly line at a world-class, energy-efficient manufacturing facility and top-tier suppliers lining up to set up operations in the Chattanooga area, Tennessee has cemented its position as the top automotive powerhouse in the U.S.,” Business Facilities Editor-in-Chief Jack Rogers said.

“The Volunteer State is well-positioned to defend its automotive crown for years to come,” Rogers added. “A skilled workforce, low-cost utilities and a burgeoning supplier network have laid the foundation for exponential growth in this key manufacturing sector.”

Volkswagen will be producing up to 150,000 vehicles per year at the Tennessee plant, which was built on a 1,400-acre site in Chattanooga’s Enterprise South Industrial Park. VW’s decision to put the plant in Tennessee was a Silver Award winner of Business Facilities‘ 2008 Economic Development Deal of the Year Award competition.

The opening of the 2-million-square-foot Chattanooga facility in May marked VW’s return to U.S. manufacturing after a 23-year hiatus following the closing of the German automaker’s last U.S. production facility in Pennsylvania. VW anticipates that it will be selling more than 1,000,000 Volkswagens per year in the United States by 2018.

An analysis by the University of Tennessee predicted that VW’s investment in Tennessee will boost incomes in the region by $511 million annually and generate more than $55 million per year in new tax revenues for both state and local governments. The Chattanooga assembly plant will employ about 2,000 workers at full production; indirect employment at local suppliers and other spin-offs is expected to exceed 11,000.

Major parts producers are making plans to locate or expand in the Chattanooga area to supply the VW plant. Several already are in place, including Gestamp Corp., which is investing $90 million in an automotive parts stamping operation at Enterprise South Industrial Park. The company expects the operation to employ 230. Gestamp has secured a contract to supply structural components for the production of the new mid-sized sedan that Volkswagen has designed specifically for the U.S. market. VW says it will source 85 percent of the components for the new vehicle from North American suppliers.

In Smyrna, TN, Nissan North America has been preparing a $1.6-billion production complex to begin rolling out electric-powered vehicles by late 2012. The Japanese automaker plans to have the plant assemble about 200,000 battery modules and as many as 150,000 Nissan Leaf electric vehicles annually.

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